Republic of the Philippines

DEPARTMENT OF EDUCATION
Region I
Division of Pangasinan II
MANAOAG NATIONAL HIGH SCHOOL
Manaoag, Pangasinan
Tel Nos. (075) 600-00721
mnhs.log@gmail.com

ENTREPRENEURSHIP
Quarter 4 – Module 1, Week 1

4M’s of Production and

Business Model

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 PRETEST

Directions: Write True if the statement is correct, otherwise write False if the
statement is incorrect on the space provided.
_______1. Output represents the final products from the production process and
distributed to the customers.
_______2. The 4M’s in the production operation are the materials, manpower,
machine and money.
_______3. Manpower in production operation refers to the workers involved in the
production of goods.
_______4. Product description is the marketing copy that explains what a product is
and its benefits.
_______5. Prototype is a replica of a product.
_______6. Product to produce is one of the factors to be considered in the production
method.
_______7. Educational qualifications and experience are criteria in considering
manpower.
_______8. Skills and expertise are not important in considering manpower.
_______9. Benefits are the reasons why customers will decide to buy the products.
_______10. Machine refers to the manufacturing equipment.
_______11. Supplier is an entity that supplies goods and services to another
organization.
_______12. Supply chain is a system of organizations, people, activities, data and
properties involved in moving a product or service from supplier to customer.
_______13. Business model describes the rationale of how an organization makes,
transports, and captures value in economic, social, cultural or other contexts.
_______14. In selecting the type of equipment to purchase, the entrepreneur may
consider cost and capacity of the equipment.
_______15. Value chain is the process or activities by which a company adds cost to
an article, that includes production, promotion, and providing of after-sales service.

MOST ESSENTIAL LEARNING COMPETENCIES:

Demonstrate understanding of the 4M’s of operation (TLE_ICTAN11/12EM-Ia-2)
*Describe the 4M’s (Manpower, Method, Machine, Materials) of operations in
relation to the business opportunity:
*Develop a product description; create a prototype of the product; test the
product prototype; validate the service description of the product with potential
customers to determine its market acceptability; select/ pinpoint potential suppliers of
raw materials and other inputs necessary for the production of the product or service;
discuss the value/supply chain in relation to the business enterprise; recruit qualified
people for one’s business enterprise and develop a business model.

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 4M’S OF OPERATIONS IN RELATION TO THE
LESSON
BUSINESS OPPORTUNITY AND DEVELOPING
1 BUSINESS MODEL
The most serious issues in the whole production system are the inputs and the
transformation process. Their quality determines the quality of the output.
The factors involved in the input and the production process are usually referred
to as the Four M’s of production, namely Manpower, Method, Machine, and Materials.
Manpower
Four M’s
• Manpower
• Method OUTPUT
• Machine
• Materials
Talks about human labor force involved in the manufacture of products. It is
measured as the most serious and main factor of production. The entrepreneur must
determine, attain and match the most competent and skilled employees with the jobs
at the most appropriate time period.
Educational qualifications and experience, status of employment, numbers of
workers required, skills and expertise required for the job are some of the manpower
criteria that must be highly considered by the entrepreneur.

Material
Talks about raw materials necessary in the production of a product. Materials
mainly form part of the finished product. Just in case the resources are below
standard, the finished product will be of unsatisfactory as well.
The entrepreneur may consider cost, quality, availability, credibility of suppliers
and waste that the raw material may produce.

Machine
Discusses about manufacturing equipment used in the production of goods or
delivery of services.
In the process of selecting the type of equipment to purchase, the entrepreneur
may consider types of products to be produced, production system to be adopted,
cost of the equipment, capacity of the equipment, availability of spare parts in the local
market, efficiency of the equipment and the skills required in running the equipment.

Method
Production method discusses the process or way of transforming raw materials
to finished products. The resources undergo some stages before it is finalized and
becomes set for delivery to the target buyers.
The selection of the method of production is dependent on product to produce,
mode of production, manufacturing equipment to use and required skills to do the
work.

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Product Description
It is the promotion that explains what a product is and why it’s worth buying?
The purpose of a product description is to provide customers with details around the
features and benefits of the product so they’re obliged to buy.
Know who your target market is, focus on the product benefits, tell the full story,
use natural language and tone, use power words that sell, and use good images.
These are guidelines for you to have a good product description; since some
customers are very particular with it since they consider the welfare of their family, if
it is safe to use.
Prototyping
A duplication of a product as it will be produced, which may contain such details
as color, graphics, packaging and directions. One of the important early steps in the
inventing process is making a prototype. Benefits are the reasons why customers will
decide to buy the products such as affordability, efficiency or ease of use. The
features of the product or service merely provide a descriptive fact about the product
or service.
It is better to test your product prototype to meet customers’ needs and
expectations; and for your product to be known and saleable. Pretesting of the product
or service is similar to a sample of the product or service given to the consumer free
of cost in order that he/she may try the product before committing to a purchase.
Supplier
An entity that offers goods and services to another business. This entity is
among of supply chain of a business, which may offer the main part of the value
contained within its products. Certain suppliers may even involve in drop shipping,
where they ship goods directly to the customers of the buyer.
Suppliers are your business partners; without them your business will not live.
You need them as much as you need your customers to be satisfied. But as an
entrepreneur you have to choose a potential supplier that has loyalty and value your
partnership; a supplier that would lead you to the fulfillment of your business
objectives, mission and vision.
Value chain is a method or activities by which a company adds value to an
item, with production, marketing, and the provision of after-sales service. The main
goal and benefit of a value chain, and therefore value chain analysis, is to make or
support a competitive benefit.
A supply chain is a structure of organizations, people, activities, data, and
resources involved in moving a product or service from supplier to customer.
The main objective of supply chain management includes management of a varied
range of components and procedures, for instance, storing of raw materials, handling
the inventory, warehousing, and movement of finished product from the point of
processing to the point of consumption.

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 Business model describes the reasons of how an organization creates,
delivers, and captures value in economic, social, cultural or other contexts. The
development of business model construction and variation is also called business
model innovation and forms a part of business plan.
It is a company's plan for how it will make revenues and make a profit. It
describes what products or services the business plans to manufacture and market,
and how it plans to do so, as well as what expenses it will incur.
There are important phases in developing your business model, namely;
Identifying the specific audience; establishing business process; recording a business
resources; developing strong value proposition; determining key business partners;
and creating a demand for today’s generation strategy and be open for innovations.
After developing a business model, we will proceed in developing a business
plan. To be able to successfully complete this module, you need to prepare a business
plan and operate your plan and finally keep records of your business transactions.
Business plan is an important tool for you to have an idea about the future of
your business. Your business plan will be your guide in the moment you will be
implementing and operating your business proposal.
You can also make use of the business plan in securing investment capital from
financial institutions or lenders. It can also be used to influence people to work for
your enterprise, to secure credit from suppliers, and to fascinate potential customers.
Read the stories of Jessie, Mercy and Monna below to fully understand the
importance of having a business plan:
“Jessie is the eldest of five children of Mr. & Mrs. Natividad. The family is having
difficulty to support for their everyday needs. Because of this, Jessie tried to enter
selling banana cue and with his dream to make his business grow, he put up many
stalls in the community without considering the advises of his friends to make a
business plan before implementing his decision. After a few months his stalls
shutdown.”
“Mercy is the youngest in the family. She found out that she loves to cut hair
and apply make up to her friends. Until such time that her friends introduced her to
their friends too for haircut and make up when there are occasions. Few months after,
Mercy was told by her friends to put up a beauty parlor in their place. So she asks her
mother who is also a businesswoman to teach her how to make a business plan and
eventually ended with a successful business.”
“Monna is a diligent student. Because of her knowledge gained from school
about business plan she was able to enhance her skills in business and finally found
herself into his laundry shop business.”
Each scenario taught us that business is not just about how much income or
profit you can get but it’s about the life of your business. And in having a business,
you also have to consider technological forces, Social forces, Political forces, Cultural
forces, Economic forces and Legal forces.
Components found in a Business Plan:
• Introduction - this part discusses what is the business plan all about.
• Executive Summary - is part of the business plan which is the first to be
presented but the last to be made.

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• Management Section - shows how you will manage your business and the
people you need to help you in your operations.
• Marketing Section- shows the design of your product/service; pricing, where
you will sell and how you will introduce your product/service to your market.
• Financial Section - shows the money needed for the business, how much you
will take in and how much you will pay out.
• Production Section - shows the area, equipment and materials needed for the
business.
• Competitive Analysis - is the strategy where you identify major competitors
and research their products, sales and marketing strategies.
• Market - The persons who will buy the product or services
• Organizational chart - is the diagram showing graphically the relation of one
official to another, or others of a company.

ACTIVITY 1: GUESS THE PICTURE

Directions. Given with the following pictures, fill in the following blanks below
to form a meaningful word. Two (2) points for each correct word.

1.____________________ 2.____________________

3. ______________________ 4. ______________________

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 ACTIVITY 2: PICTURE ANALYSIS
Directions: Answer the following questions base on the picture shown
below. Write your answers on the space provided. Two (2) points in each
correct answer.

1. Are you familiar with the picture above? Give one example of a food business
establishment that you think is famous among teenagers today.
______________________________________________________________
2. What do you think is the reason why this particular food business establishment
becomes famous among teens nowadays?
______________________________________________________________
3. Do you know some other ways to enjoy their product other than coming in
personally into their store and buying their product for yourself?
______________________________________________________________
4. Do you think such strategies are effective to make the business more
productive? Why or why not?
______________________________________________________________

SUMMATIVE EVALUATION

Multiple Choice: Read and answer each statement carefully then write the letter
of the best answer on a separate sheet of paper.
1. Which of the following refers to the human workforce involved in the manufacture
of products?
A. Materials B. Method C. Machine D. Manpower
2. The 4M’s of production are as follows except ONE.
A. Management B. Manpower C. Method D. Machine
3.Which of the following refers to the marketing copy that explains what a product
is and why it is worth purchasing?
A. Prototype C. Business Model
B. Product description D. Suppliers
4. It represents the final products from the production process and distributed to the
customers.
A. Input B. Supplies C. Output D. Materials

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5. It is a replica of a product.
A. Prototype C. Business Model
B. Product description D. Suppliers
6. Which of the following refers to the system of organizations, people, activities,
information, and resources involved in moving a product or service from supplier to
customer?
A. Supply chain C. Business model
B. Value chain D. Prototype
7. Which of the following is the process or activities by which a company adds value
to an article, including production, marketing, and the provision of after- sales
service?
A. Supply chain C. Business model
B. Value chain D. Prototype
8. It describes the rationale of how an organization creates, delivers, and captures
value in economic, social, cultural or other contexts.
A. Prototype C. Business Model
B. Product description D. Suppliers
9. It is an entity that supplies goods and services to another organization.
A. Prototype C. Business Model
B. Product description D. Suppliers
10. Which of the following refers to the manufacturing equipment used in the
production of goods or delivery of services?
A. Machine B. Manpower C. Method D. Materials
11. It refers to the process or technique of converting raw materials to finished
products.
A. Machine B. Manpower C. Method D. Materials
12. It simply refers to the raw materials needed in the production of a product.
A. Machine B. Manpower C. Method D. Materials
13. Statement I- Skills and expertise is not important in considering manpower.
Statement II- Benefits are the reasons why customers will decide to buy the
products.
A. Only Statement I is true. C. Both Statements are true.
B. Only Statement II is true. D. Both Statements are false.
14. Statement I - Educational qualifications and experience is one of the criteria in
considering manpower.
Statement II - Product to produce is one of the factors to be considered in
method or production method.
A. Only Statement I is true. C. Both Statements are true.
B. Only Statement II is true. D. Both Statements are false.
15. Statement I - In selecting the type of equipment to purchase, the entrepreneur
may consider cost and capacity of the equipment.
Statement II - The purpose of a product description is to supply customers
through details around the features and benefits of the product.
A. Only Statement I is true. C. Both Statements are true.
B. Only Statement II is true. D. Both Statements are false.